Suppose the Supply Curve for Breakfast Cereals Is Upward Sloping

question 51

Multiple Choice

Suppose the supply curve for breakfast cereals is upward sloping. Suppose also that as average household income increases we observe a fall in the price of breakfast cereal. We can conclude that breakfast cereal is a(n)

• A) normal good.
• B) luxury good.
• C) inferior good.
• D) substitute good.
• E) necessity good.

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Definitions:

Horizontal Analysis

A financial analysis technique that compares historical data or ratios across different periods to identify trends and growth.

Income Statement

A financial statement that shows a company's revenues, expenses, and net income over a specific period of time.

Sales

The total amount of revenue generated by a company from the sale of goods or services before any expenses are deducted.

Percent Change

A mathematical calculation that indicates the degree of change over time, expressed as a percentage.